Spooky Rates | Urban Living
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Spooky Rates

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Haunted houses, spiders, graveyards—all scary things to some folk. However, the scariest thing right now is inflation and interest rates! Some say the silver lining to the increased costs of groceries is that, compared to what you spent on food items last year, your bags will be fewer and lighter to carry up the stairs. I bought three bags of groceries the other day, and they were a whopping $180.

I admit I did buy a bit of expensive protein, but I tried to be careful and shop for deals. I can't imagine the cost to feed a family with kids right now. The way things are going, prices will just keep increasing.

Let's say a year ago, you and your beloved were in the market to buy a home. Competition was fierce for what little inventory was available to purchase. You were pre-approved for a zero-down loan for $550,000 at 3.5% interest. Your monthly payment with taxes and insurance was going to be around $3,000 per month—totally doable.

But after offer after offer, you tired of running around with your agent looking at properties. You might have even tried to cast spells at the sellers, smudged your car and apartment to clean your vibes, made offerings to God, Satan or the big Spaghetti Monster in the sky. Nothing worked.

So, you decided to wait until the market cooled. Now, it has but, damnit, interest rates have gone up to almost 7%! That makes the monthly payment more like a frightening $4,200—a $1,200 difference.

Should you wait for rates to come down? According to my crystal ball, that won't be any time soon. Inflation for the year is around 8.26%, purchasing power is way down and the cost of goods and services are high. You know this because gas, groceries and just about everything is frightening high.

The Fed oversees monetary policies in the U.S. and has suggested rates will keep going up and up until inflation cools. Mortgage rates could go up to 9% by spring, which means that same loan payment—zero down, $550,000 sales price—would be $5,000 per month!

The answer is simple: Don't wait for the grim reaper to appear, buy now if you can. With the market getting softer for sellers, ask your lender about "2-1 buy down" loans. Ask sellers to contribute to some of your closing costs to buy down your mortgage rates. Homes are sitting on the market longer, which gives you bargaining power like we haven't seen for buyers in several years.

When you go looking again, remember, haunted houses are often down dead-end streets, ghosts usually avoid living rooms, run away if the key looks like a skeleton and if the sheets are missing off the beds, the place is probably rife with ghosts!